Ballard: Loan bill impact unknown
Troy University officials said the impact may be minimal on a portion of the national health care overhaul that gives the government control of student loans.
“Students probably won’t notice a difference,” said Carol Ballard, associate vice chancellor of financial aid. “It will change the way the administration does business, of course, because the loans come from a different source.”
Ballard said the changes for students receiving private loans will take effect June 30 for those who haven’t already started drawing on that loan.
“If you have a loan and have a first disbursement, you can get a second after June 30,” she said.
After that date, student loans will come from the government.
The law puts the government directly at the top of the student-loan process, taking the bank as a distributor out of the picture, the Associated Press reports.
The president told a group of students at Northern Virginia Community College this move would save more tan $60 billion over the next 10 years that can be used for Pell Grants and other investment purposes, AP reports.
At Troy University, Ballard said the school has three types of loan-offering tools.
Two of those, a direct loan and the Perkins Loan, both of which are government driven.
The Perkins Loan, she said, is government funded, and the university serves as the third party in distributing those funds.
Ballard said other students have loans through a federal education program that is funded by private sources.
She said this change won’t make a difference in requirements for receiving a loan at Troy.
“We’re not anticipating any big deal on the student side,” she said.
Ballard said students typically begin the financial aid process by filling out a Free Application for Federal Student Aid. “We’re the checkpoint to make sure it’s all right,” she said.
“From there, they offer an award for the most equitable programs first.”
The AP reports private lenders will still make students loans, but those loans will not be backed by the government.
The bill will also guarantee workers in low-paying jobs will be able to reduce loan payments once they graduate from college. Current caps on monthly payments are at 15 percent of a worker’s income, while the new law will make the cap 10 percent, AP says.